Marketing Strategy

Marketing tactics for pure-play eRetailers

Pure-play online fashion companies have been struggling to find their audience over the past few years. With the increasing number of brick and mortar retailers now opening online stores, these companies will find it increasingly difficult to survive.

This month has seen Limited Too launch its new web site, targeting young teen and pre-teen girls, with rich content and bright graphics, and J.Baker launch its CasualMale site, targeting oversized adults with a selection of products based upon its successful store brands.

Both these companies are targeting a well defined niche in which they have experience. They already have an established customer base and a recognized brand. What’s more, visitors can see and touch the product and identify with the brand through traditional stores.

What then can struggling pure-play retailers do to compete with the growing number of traditional stores setting up shop online?

One suggestion might be to think of online shopping as an electronic catalog. Many traditional catalog retailers have been among the most successful at establishing an online presence. Possible reasons for this are:

• An established customer base

• Customers experienced at buying and waiting for delivery

• Established fulfillment services

• Established customer services

• Established graphic design and marketing of merchandise through print media

• Established brands

• Increased exposure through catalogs mailed to a large audience

•  A well-defined market niche

This suggests one strategy pure play companies should consider:

Mail Order Catalogs – promoting the web site through a traditional mail order catalog. This has a number of advantages for pure play companies:

• It accesses new customers who are not yet online

• It increases brand awareness

• It gives customers something tangible to identify with the brand

• A catalog is often more easily accessed than a website

The cost of producing and mailing a catalog to millions of potential customers can be quite high, but direct mail remains one of the most cost effective methods of reaching a target audience.

See lucy.com snippet on launching a mail order catalog

Niche Marketing

If you are not dominant in your niche, redefine your niche to one that you can be dominant in. So goes the traditional theory of niche marketing.. Does the same theory holds true online just as it does in the brick and mortar world? Amazon.com has redefined its niche from people looking for good value books, to one of time-pressed consumers looking for one place to find most things with easy service and reasonable prices. Amazon.com certainly doesn’t offer the lowest priced books on the Internet.

What holds true for Amazon.com holds true for everyone else on the Internet: a well defined niche helps customers identify with the company. One of the great advantages of the Internet for online retailers is that it allows a dispersed market niche to be served profitably. Where there are not enough customers in a single geographic market to support a traditional store, online those customers can be brought together from all over the country or the world.

Ironically, Amazon.com is in danger of losing their brand identity by continuously extending it into new territory. It remains to be seen whether the company can successfully dominate online in all categories the way WalMart has done in traditional retailing.

Consider WalMart’s niche. WalMart targets price conscious, time-pressed consumers looking for good value and great service. Does this sound similar to Amazon.com’s target consumer? Arguably Amazon’s customers may be willing to pay a higher price for faster, better service, but for how long?

The difficulty of trying to be all things to all people is that it becomes very easy to lose brand identity. Consider department stores. Over the years they have struggled with brand identity. Many department stores have spent millions of dollars to reinforce particular aspects of the store’s product range in an attempt to give the brand more of an identity, or more appeal to a certain niche.

In the long run it is likely the niche players who can dominate a category will be more successful at drawing a loyal customer base to their site, thereby developing a brand identity and long term success.

Questions to ponder on:

• Do you have a clearly defined market niche?

• Are you in a position to be the dominant player in that niche?

• Are you doing everything you can to identify your brand with your target niche?

• Can you be more successful by narrowing your focus and doing a better job of serving the needs of your niche market?

• If you broaden your niche, will you disenfranchise your existing customer base?

• Is your niche defined by product assortment or market needs?

• Can you redefine your product assortment to more closely meet the needs of a specific market?

• Can you add additional content to your web site to reinforce your niche status?

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